Balt. Scrap Corp. v. David J. Joseph Co.

Full title: BALTIMORE SCRAP CORP. v. THE DAVID J. JOSEPH CO., et al

Court: United States District Court, D. Maryland

Date published: Mar 24, 1996

CIVIL NO.: L-96-827 (D. Md. Mar. 24, 1996)

Opinion

CIVIL NO.: L-96-827

March 24, 1996

MEMORANDUM

SUSAN K. GAUVEY, United States Magistrate Judge.

This case is currently before the Court on four motions relating to discovery. (Paper Nos. 31, 32, 43 and 44).¹ By Order dated April 19, 1996 and pursuant to 28 U.S.C. § 636 and Local Rules 301 and 302 of the Rules of the United States District Court for the District of Maryland, the case has been referred to the undersigned United States Magistrate Judge for the determination of discovery disputes regarding Noerr-Pennington issues implicated in the case, including the pending motions. (Paper No. 19). Hearings were held before me on these motions on July 23, 1996 and August 8, 1996.

1 A fifth motion, Plaintiff's Motion to Compel Production of Documents from Marlen Trading, is not yet ripe for decision. Previously, Defendants' Motion to Take Deposition of Lalit Gadhia (Paper No. 37) was denied by separate Order dated August 9, 1996 (Paper No. 57). Plaintiff's Motion to Take Written Deposition of Francis X. Duggan (Paper No. 24) was granted by separate Order dated August 9, 1996 (Paper No. 56).

For the reasons set forth in detail below, the Court rules, as follows, on the pending motions:

1. Plaintiff's Motion to Compel Production of Documents from Neuberger, Quinn, Gielen, Rubin Gibber, P.A. and Irwin, Kerr, Green, McDonald Dexter is GRANTED.

2. Plaintiff's Motion to Compel Production of Documents from Rich Henderson is GRANTED IN PART AND DENIED IN PART.

3. Motion of Plaintiff to Compel Defendants to Provide Discovery is GRANTED IN PART AND DENIED IN PART.

4. Motion of Defendant the David J. Joseph Company to Compel Plaintiff to Provide Discovery is GRANTED IN PART AND DENIED IN PART.

This Memorandum will address each motion seriatim.

Facts

This is a private antitrust action. The parties are competitors in the scrap metal industry. Plaintiff, the Baltimore Scrap Corporation ("BSC") claims that defendants, the David J. Joseph Company ("DJJ") and the General Manager of DJJ's Baltimore facility, David Workum, covertly and unlawfully opposed BSC's efforts to obtain a zoning permit to modernize one of its scrap metal facilities.

In the fall of 1991, BSC sought zoning approval to install a ferrous scrap metal shredder² at its Carbon Avenue facility in Baltimore. There was substantial opposition to BSC's application from government officials and citizens groups.³ The Board of Municipal Zoning Appeals ("BMZA") denied BSC's application, and the Baltimore City Circuit Court upheld the BMZA determination.

2 A ferrous scrap metal shredder shreds, separates and cleans scrap automobiles and other scrap iron and steel to be sold to steel mills and foundries.

3 The community groups included the Curtis Bay Association, Inc., Concerned Citizens for a Better Brooklyn, Inc. and the Maryland Waste Coalition.

Plaintiff reapplied for zoning approval during the summer of 1992. Again, there was substantial opposition to BSC's application from government officials and citizens groups. Despite this opposition, the BMZA approved BSC's application in August 1992. The community groups appealed the BMZA's decision to the Baltimore City Circuit Court and Maryland's Court of Special Appeals. Both courts affirmed the BMZA's decision.

The present case arises in connection with the community groups' appeal of the BMZA's 1992 decision to grant BSC's zoning application. Although BMZA's approval of the zoning application was ultimately upheld, BSC alleges in the present case that defendants covertly paid the community groups' legal fees in prosecuting the appeal without disclosing their participation. In doing so, BSC contends that defendants violated the Sherman Antitrust Act, Maryland's Antitrust Act and other state laws.

Central to the case is whether defendants are entitled to antitrust immunity under the Noerr-Pennington doctrine.⁴ BSC alleges that the case falls under the "sham exception" to the Noerr-Pennington doctrine,⁵ and that defendants are not entitled to antitrust immunity because defendants' opposition to BSC's zoning application was "objectively baseless," and defendants used the legal process as an anti-competitive weapon.⁶ BSC further argues that defendants should not be entitled to antitrust immunity under Noerr-Pennington because they fraudulently did not disclose their financial backing of the community groups' appeals.⁷

4 Noerr-Pennington immunity generally provides that a person or entity has a First Amendment right to petition government, even if to the disadvantage of a competitor.

5 Eastern R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 144 (1961) (noting that there is no antitrust immunity where petitioning activity "ostensibly directed toward influencing government action, is a mere sham to cover . . . an attempt to interfere directly with the business relationships of a competitor."). See also California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 512 (1971) (finding that complaint was a sham where it was instituted "regardless of the merits of the case.").

6 See Professional Real Estate Investors, Inc. v. Columbia Industries, Inc., 508 U.S. 49, 59-61 (1993) (finding two-part analysis which plaintiff must satisfy to establish sham exception to Noerr-Pennington immunity. First, the lawsuit must be "objectively baseless" such that "no reasonable litigant could realistically expect success on the merits." Second, there must be "an attempt to interfere directly with a competitor's business relationships . . . through the use of the government process — as opposed to the outcome of that process — as an anti-competitive weapon.") (quotations omitted).

7 See id. at 62 n. 6 (noting that "[w]e need not decide here whether, and, if so, to what extent Noerr permits the imposition of antitrust liability for a litigant's fraud or other misrepresentations.").

The Court has recognized that Noerr-Pennington immunity constitutes an initial, potentially dispositive issue in this case. Accordingly, by Order dated May 7, 1996, discovery has been limited at this stage of the case to the following Noerr-Pennington issues:

1. Whether the zoning litigation at issue was objectively baseless;

2. Whether there was an anti-competitive interest/purpose to the zoning litigation; and

3. Whether defendants acted fraudulently during the zoning litigation.

(Paper No. 18).

Discussion I. Plaintiff's Motion to Compel Production of Documents from Neuberger, Quinn, Gielen, Rubin Gibber, P.A. and Irwin, Kerr, Green, McDonald Dexter

BSC has moved to compel the production of a May 17, 1993 memorandum authored by DJJ Vice President, Stephen Wulff, to DJJ President, Louis Terhar ("Wulff memorandum"). (Paper No. 31). DJJ alleges that the Wulff memorandum summarizes legal advice provided to DJJ from its antitrust counsel, Richard Wertheimer. The memorandum is being withheld by third party law firms Neuberger, Quinn, Gielen, Rubin Gibber, P.A. ("Neuberger law firm") and Irwin, Kerr, Green, McDonald Dexter ("Irwin law firm"). Defendants oppose production of the Wulff memorandum (Paper No. 38), and have filed a supplemental memorandum in support of their opposition (Paper No. 47) to which BSC has replied (Paper No. 62). BSC has filed a supplemental memorandum in support of its Motion to Compel (Paper No. 46) to which defendants have replied (Paper No. 48). On August 15, 1996, defendants filed a post-hearing memorandum in further support of their opposition to BSC's Motion to Compel. (Paper No. 59). On August 22, 1996, plaintiffs replied to defendants post-hearing memorandum. (Paper No. 60). The Wulff memorandum has been submitted to the Court for in camera review.

While defendants' privilege argument is superficially appealing, it cannot withstand careful scrutiny. I find that portions of the memorandum represent a privileged attorney-client communication, but that the privilege was waived when it was distributed outside of DJJ, most particularly when distributed to David Irwin, counsel for the community groups. Accordingly, the Court will grant plaintiff's Motion to Compel.

A. Background

David Irwin of the Irwin law firm represented the community groups and Gloria Sipes, President of one of the community groups, throughout the zoning litigation. Approximately three weeks after the Baltimore City Circuit Court affirmed the decision of the BMZA, the community groups moved to stay the circuit court's decision pending appeal to Maryland's Court of Special Appeals. Around this same time, in what the parties now colloquially refer to as the "errant fax," BSC obtained a copy of a preliminary draft of the Motion to Stay circulated by the Irwin law firm to the Neuberger law firm. The facsimile indicated that the Neuberger law firm had provided a copy of the draft motion to David Workum, General Manager of DJJ's Baltimore operations which traded under the name the United Iron Metal Company or the United Holdings Company.⁸

8 United Holdings is the successor to the United Iron Metal Company. The United Iron Metal Company was purchased by DJJ in 1990. Apparently, however, the President of United Iron, I.D. Shapiro, retains some financial interest in United Holdings in that part of the purchase price of United Holdings was deferred and is payable to Shapiro from United Holding's earnings. (Paper No. 38, Exhibit H at 3). Throughout this litigation, I.D. Shapiro has been represented by the Neuberger law firm.

Apparently incensed that competitors may have been funding the community groups' efforts to oppose BSC's zoning application, BSC's President, David Simon, allegedly threatened litigation against DJJ and the community groups opposing its zoning application. Messrs. Wulff and Workum state that they became aware of Mr. Simon's alleged threats against DJJ "and others" in late March 1993. (Paper No. 38, Exhibits D and G). A telephone message receipt dated March 29, 1993 from Ms. Sipes to Mr. Irwin indicates that Mr. Simon had threatened a "monopoly" action against Ms. Sipes and "her cronies," and that Mr. Simon had advised Ms. Sipes that United Iron was funding the appeal. (Paper No. 38, Exhibit F).

On April 12, 1993, BSC opposed the community groups' Motion to Stay. (Paper No. 38, Exhibit H). In this motion, BSC alleges that the United Holdings Company and its former President, I.D. Shapiro, were attempting to "perpetrate a fraud on [the] Court by concealing their role as the real parties in interest," and that the community groups "have participated in this fraud by misrepresenting their claim to standing and their relationship to United." Id. at 4. Elsewhere, the motion asserts that the community groups "are attempting to perpetrate a fraud on [the] Court by acting as a surrogate for one of BSC's competitors." Id. at 1.

DJJ alleges that in response to BSC's threats, it sought advice from its antitrust counsel, Richard Wertheimer, then at the law firm of Arnold Porter. (Paper No. 2). Specifically, Mr. Wulff states that in late March 1993, the President of DJJ, Louis Terhar, instructed him to consult with Mr. Wertheimer regarding the alleged antitrust threats made by Mr. Simon and BSC. (Paper No. 38, Exhibit D). In response to Mr. Terhar's request, Mr. Wulff asserts that beginning in late March 1993, he had several telephone conversations with Mr. Wertheimer regarding the alleged threats. Id. at 2.

The May 17, 1993 memorandum, the subject of this motion, is purportedly the product of the conversations between Messrs. Wulff and Wertheimer, and it recounts, at least in part, Mr. Wertheimer's antitrust advice. The memorandum is authored by Mr. Wulff and directed to Mr. Terhar. It is marked in bold letters "PRIVILEGED AND CONFIDENTIAL." David Workum was provided a copy of the memorandum. Mr. Wertheimer was not provided a copy of the memorandum.

Mr. Workum states that the only person with whom he shared the Wulff memorandum was I.D. Shapiro. (Paper No. 38, Exhibit G at 2). Workum alleges that he provided a copy of the memorandum to Shapiro "because BSC was asserting that DJJ was working together with I.D. Shapiro and others in violation of the antitrust laws . . . [and so that] he would have the benefit of the legal advice received by DJJ with respect to those threats." Id. Further, Workum notes "[i]n providing a copy to Mr. Shapiro, I understood that the memorandum would not be disclosed except to those persons who had been threatened by BSC or counsel for those persons." Id.

On May 21, 1993, Mr. Shapiro shared a copy of the Wulff memorandum with his lawyer, Isaac Neuberger, of the Neuberger law firm. (Paper No. 47 at 4). Mr. Neuberger subsequently provided a copy of the Wulff memorandum to the Irwin law firm on May 25, 1993. Id. There is no evidence of further dissemination of the Wulff memorandum.

Shortly after filing suit, BSC served subpoenas on both the Irwin and Neuberger law firms seeking documents relating to the zoning litigation. In response to the subpoena, the Irwin and Neuberger law firms produced their files concerning the zoning litigation except for the Wulff memorandum, which they withheld at the direction of counsel for DJJ. Plaintiff now moves to compel production of the memorandum.

B. Discussion

Defendants argue that the Wulff memorandum is a privileged communication between an attorney and its client and, therefore, is not discoverable. (Paper No. 38 at 7). BSC conversely contends that the attorney-client privilege did not attach to the document because neither the author nor recipient of the memorandum was an attorney; and, moreover, even if the initial communication was privileged, the privilege was waived when it was shared with the Irwin and Neuberger law firms. (Paper No. 31). Defendants have responded that under the "common interest doctrine" the privilege was not waived. (Paper No. 38). Plaintiff replies that the common interest doctrine is inapplicable in this case. (Paper No. 46).

1. The Attorney-Client Privilege

The purpose of the attorney-client privilege is "to encourage full and frank communications between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice." Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The privilege has a "venerable pedigree" and is established in the specialized federal common law. United States v. (Under Seal), 748 F.2d 871, 874 (4th Cir. 1984).

The traditional test for determining the applicability of the privilege was enunciated by Judge Wyzanski in United States v. United Shoe Mach. Corp., 89 F. Supp. 357 (D.Mass. 1950):

The privilege applies only if (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of a bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purposes of securing primarily either (1) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.

Id. at 358-59. This passage has been quoted with approval by the Fourth Circuit. United States v. Jones, 696 F.2d 1069, 1072 (4th Cir. 1982). The burden is on the proponent of the privilege to demonstrate "not only that an attorney-client relationship existed, but also that the particular communications at issue are privileged and that the privilege was not waived." Id. Accord United States v. Martin Marietta, 886 F. Supp. 1243, 1244 (D.Md. 1995).

It is established in the Fourth Circuit that the privilege attaches not only to communications by the client to the attorney, but to advice from the attorney to the client. (Under Seal), 748 F.2d at 874. Because the privilege interferes with the truth seeking process and "is in derogation of the public's right to every man's evidence," it is "not favored by the federal courts" and "is to be strictly confined within the narrowest possible limits consistent with the logic of its principle." In re Grand Jury Proceedings, 727 F.2d 1352, 1355 (4th Cir. 1984).

I find that the attorney-client privilege attached to the Wulff memorandum at least originally, and in so doing reject plaintiff's argument that the privilege is inapplicable because "it is undisputed that the author and recipient of the memorandum are not lawyers . . . [and that no] lawyer was apparently copied on the memorandum. . . ." (Paper No. 31 at 5). First, upon in camera review of the memorandum I find that it is principally Mr. Wulff's recapitulation of Mr. Wertheimer's legal advice regarding DJJ's antitrust liability. Second, I find that Wulff was, in effect, a conduit for the passing of legal advice from Wertheimer to the persons in DJJ who could act on the advice. As a corporation, DJJ can only act through its directors, officers, employees and agents. Sandberg v. Virginia Bankshires, Inc., 979 F.2d 332, 351 (4th Cir. 1992). As a Vice President of DJJ, Wulff was designated to be a liaison with DJJ's antitrust counsel, Mr. Wertheimer. (Paper No. 38, Exhibit D). Finally, I find that the requisite respect for confidentiality was given to the memorandum. The memorandum was only given to the President of the corporation and a Manager who was threatened by BSC. Compare In re Air Crash Disaster at Sioux City, Iowa, 133 F.R.D. 515, 521 (D.C. Ill. 1990) (memo sent to 500 corporate employees cannot be "confidential").

Courts have consistently recognized that this type of intra corporate distribution of legal advice received from counsel does not vitiate the privilege even though the legal advice is relayed indirectly from counsel through corporate personnel. See, e.g., In re Grand Jury 90-1, 758 F. Supp. 1411, 1412 (D. Col. 1991) (attorney-client privilege applies to corporate President's letter to Board of Directors discussing legal advice given to President by attorney; corporation was client, and the President relayed the information to the board of directors as a means of making legal advice available to corporation); SCM Corp. v. Xerox Corp., 70 F.R.D. 508, 518 (D. Conn), appeal dismissed, 534 F.2d 1031, 1032 (2d Cir. 1976) ("A privileged communication should not lose its protection if an executive relays legal advice to another who shares responsibility for the subject matter underlying the consultation."). "This follows from the recognition that since the decision-making power over the corporate client may be diffused among several employees, the dissemination of confidential communications to such persons does not defeat the privilege." Bank Brussels Lambert v. Credit Lyonnais, 160 F.R.D. 437, 441 (S.D.N.Y. 1995).

A wiser course in this instance may have been for Wertheimer to memorialize his advice in writing and directly submit it to Louis Terhar. See 1 Stone Taylor, Testimonial Privileges § 1.30, 1-94 n. 350 (2nd ed. 1995). Nonetheless, because I find that Wulff, at the direction of DJJ's President and acting in a corporate capacity, was simply transmitting solicited legal advice provided by counsel to a select group of DJJ employees, I conclude that the attorney-client privilege originally attached to the Wulff memorandum.

2. The Common Interest or Joint Defense Doctrine

BSC argues that even if the attorney-client privilege attaches to the Wulff memorandum, the privilege was waived when it was distributed outside DJJ. Defendants conversely contend that, pursuant to the "common interest rule," DJJ was permitted to share the memorandum with persons threatened by Simon and BSC without waiving the privilege.

"[T]he `essence' of the attorney-client privilege is the protection of what was `expressly made confidential or should reasonably be assumed. . . .'" Sheet Metal Workers International Assoc. v. Sweeney, 29 F.3d 120, 125 (4th Cir. 1994). Hence, "any voluntary disclosure by the client to a third party waives the privilege not only as to the specific communication disclosed but often as to all other communications relating to the same subject matter." United States v. Jones, 696 F.2d 1069, 1072 (4th Cir. 1982).

Not every disclosure of a privileged attorney-client communication, however, will waive the privilege. The Fourth Circuit has recognized that "persons who share a common interest in litigation should be able to communicate with their respective attorneys and with each other to more effectively prosecute or defend their claims" without waiving privileged attorney-client communications. In re Grand Jury Proceedings 89-3 89-4, 902 F.2d 244, 249 (4th Cir. 1990). This "joint defense" or "common interest" doctrine is an extension of the attorney-client privilege and "presupposes the existence of an otherwise valid privilege." Id.

In determining the applicability of the privilege, the focus is "not on when [the] documents were generated, but on the circumstances surrounding the disclosure of [the] privileged documents to a jointly interested third party." Id. The doctrine applies in both civil and criminal cases and to both plaintiffs and defendants.⁹ Id. It is not necessary that there be actual litigation in progress for the privilege to apply. United States v. Schwimmer, 892 F.2d 237, 244 (2d Cir. 1989). However, "[o]nly those communications made in the course of an ongoing common enterprise and intended to further the enterprise are protected." Id. Accord United States v. Moss, 9 F.3d 543, 550 (6th Cir. 1993); United States v. Bay State Ambulance and Hospital Rental Service, 874 F.2d 20, 28 (1st Cir. 1989); In the Matter of Bevill, Bresler Schulman Asset Management Corp., 805 F.2d 120, 126 (3d Cir. 1986). Further, to qualify for the privilege, the communication must have been made with reasonable expectation that the communication would be maintained in confidence. Sheet Metal Workers International Assoc., 29 F.3d at 125; Schwimmer, 892 F.2d at 244; Bay State Ambulance and Hospital Rental Service, 874 F.2d at 28-29; United States v. Keplinger, 776 F.2d 678, 701 (7th Cir. 1985). In the Fourth Circuit, the expectation of confidentiality applies to the attorney as well as the client. Sheet Metal Workers International Assoc., 29 F.3d at 125.

9 The Court disagrees with the plaintiff, however, that "the involvement of at least one lawyer in the communication is essential to establish a joint defense privilege." (Paper No. 46 at 4). While some of the circuits may have so held, see, e.g., U.S. v. Bay State Ambulance and Hosp. Rental Service, 874 F.2d 20, 29 (1st Cir. 1989), the Fourth Circuit has not. See In re Grand Jury Subpoenas, 89-3 and 89-4, 902 F.2d 244, 249 (4th Cir. 1990) ("Persons who share a common interest in litigation should be able to communicate with their respective attorneys and with each other to more effectively prosecute or defend their claims.") (emphasis added).

I will not find that common interest rule applies in this case for several reasons. First, I am not convinced that DJJ and the community groups shared a common legal interest in defending against BSC's threats. Second, I do not find that distribution of the memorandum was made in the course of an ongoing common enterprise to defend against BSC's threats or to ascertain whether there was a mutuality of interests among the threatened parties. Finally, defendants have not met their burden of showing that Workum intended that the Wulff memorandum remain confidential.

a.) Defendants have not demonstrated that DJJ and the community groups shared a common legal interest.

Whether the common interest rule applies "must rest in the first instance on the existence of some common interest about a legal matter." Sheet Metal Workers International Assoc., 29 F.3d at 124; see also United States v. Aramony, No. 95-5532, 1996 WL 397246, at *26 (4th Cir. July 17, 1996). That persons are jointly accused of an unlawful act or face a common threat of litigation, does not necessarily demonstrate, at least for purposes of the common interest doctrine, that they share a common interest in the suit or in defending against the accusations. "The privilege arises out of a need for a common defense, as opposed merely to a common problem." Medcom Holding Co. v. Baxter Travenal Laboratories, 689 F. Supp. 841, 845 (N.D. Ill. 1988). Co-defendants, for example, may be accused of the same wrongful act and may be parties to the same lawsuit. Although they plainly have a common interest in being exculpated and defending against the State's allegations, it is not necessarily true that their interests in relation to one another are complementary. Indeed, commonly they are not. See, e.g., United States v. Lopez, 777 F.2d 543, 552-53 (10th Cir. 1985) (even though the parties were co-defendants, joint interest rule does not apply where interests of co-defendants were potentially adverse, attorney for only one co-defendant was at meeting and there was no evidence that purpose of the meeting was to develop a joint defense); Government of VI v. Joseph, 685 F.2d 857, 861-62 (3d Cir. 1982) (common interest rule does not protect defendant's statements to counsel for another defendant where defendants' interests were at all times antagonistic, and where purpose of communication was not further a joint interest but to exonerate an innocent third person). See also Sheet Metal Workers International Assoc., 29 F.3d at 124-25; United States v. Aramony, No. 95-5532, 1996 WL 397246, at *26 (4th Cir. July 17, 1996).

Sheet Metal Workers International is illustrative. Here a union pension fund retained the law firm of Arent, Fox, Plotkin Kahn ("Arent Fox") to represent it in connection with a grand jury investigation of the fund for the alleged fraudulent use of pension funds. The fund's former counsel, Raymond Sweeney, corresponded with attorneys from Arent Fox regarding the transactions which gave rise to the fraud investigation — transactions in which Sweeney had represented the fund. The grand jury subsequently subpoenaed an attorney from Arent Fox, apparently in reference to Sweeney's communications with Arent Fox. Sweeney attempted to quash the subpoena, arguing that the testimony of the Arent Fox lawyer was protected under the attorney-client privilege and common interest rule. Specifically, Sweeney contended that the common interest between him and Arent Fox was "`keeping criminal investigations and other government interference with the Fund at bay.'" Sheet Metal Workers International Assoc., 29 F.3d at 124. The Fourth Circuit disagreed and refused to apply common interest doctrine, finding that although Sweeney "had an interest in avoiding indictment or civil liability for himself . . . the Fund did not have such an interest. Indeed, the interest of the Fund was to the contrary." Id.

U.S. v. Aramony also demonstrates that mere assertions of a "common interest" are insufficient to invoke the privilege. Rather, a party must show unanimity of legal interest. Aramony was an official of the United Way of America ("UWA"). After a jury trial he was convicted of numerous violations of federal law for defrauding the UWA. On appeal Aramony claimed that the joint defense privilege should have shielded his communications with UWA attorneys during the pre-indictment investigation phase of the matter. Aramony contended that "he and `UWA pursued a common strategy with respect to the press inquiries and any potential litigation to which the press reports could give rise.'" Id. The Fourth Circuit rejected Aramony's argument, finding that "Aramony ha[d] not shown how UWA would be affected (apart from the stain of its reputation) by the allegations concerning [Aramony]." Id.

I am not convinced that DJJ and the community groups in the present case shared a common interest, although they may have momentarily faced a common threat. The only evidence of a BSC threat of antitrust action against the community groups is a telephone message slip reporting a call to Dave [Irwin] from Gloria Sipes in which it is reported that "Simon is going to sue all of them for a monopoly. . . ." (Paper No. 38, Exhibit 7).

There is a distinction between the parties' joint strategy to defeat BSC's zoning application, albeit for different reasons, and a joint strategy for defense of allegations of monopoly once the covert nature of DJJ's role was learned. Other than arguing that the community groups were also threatened by BSC, defendants offer no explanation as to why the interests of DJJ and the community groups, in defending against BSC's threats, were complementary. To the contrary, BSC has alleged, that "at the time of the disclosure of the memorandum, Irwin, Kerr represented community groups whose interests in the zoning litigation was a odds" with DJJ. (Paper No. 31 at 5).

The evidence before the Court is ambiguous on the question of the community groups' knowledge of the source of its legal fees' funding. The facts in the record suggest just as likely a divergence of interest between the community groups and DJJ, once BSC learned of the DJJ covert funding, as a unanimity of interest. None of the papers filed in the zoning litigation on behalf of the community groups which have been submitted to the Court mention DJJ, United Holdings, Mr. Shapiro, Mr. Wertheimer, Rich Henderson or the Neuberger firm. Although there were apparently regular conversations among the Irwin firm, Neuberger firm, Shapiro and DJJ, there is no evidence of any communications between DJJ and the community groups, the Neuberger firm and the community groups or Shapiro and the community groups. The record does not demonstrate that there were any communications between the Irwin firm — which was being paid by DJJ — and its clients, the community groups, wherein the Irwin firm advised the community groups that their legal costs were being borne by DJJ, and the ramifications of that funding. Exhibit F to defendants' motion in opposition suggests that at least Mr. Simon believed that the community groups were unaware of DJJ's funding. (Paper No. 38). Statements in the Wulff memorandum also suggest that DJJ's role, acting through Marlen Trading, was covert as to the community groups.

While defendants assert that "[t]he Irwin firm met with its clients on April 3, 1993 to discuss Plaintiff's threats," (Paper No. 48, at 2), they offer no evidence to rebut plaintiff's allegation that the community groups did not know — before Simon made the threats — that DJJ was funding opposition to BSC's application. Moreover, the cited support for defendants' assertion of a meeting — "Exhibit A" — does not support the assertion. Indeed, as far as the notes can be deciphered, the first page of the notes seem to support a discussion of a further appeal and/or stay only, with an unexplained reference to "Marlen Trading." The second page is also unhelpful to defendants' position. Finally, the fact of a meeting between David Irwin and the community groups to discuss the threat, if established, does not necessarily establish a common legal interest.

Defendants' demonstration that Mr. Wood relayed Mr. Wertheimer's antitrust advice to Mr. Irwin does not change the result. (Paper No. 59, Exhibit A). The determinative question is whether the interests of the community groups and DJJ were the same or adverse, and, as discussed below, whether the parties engaged in a joint enterprise to defend against BSC's threats, (not the admitted joint enterprise of defeating BSC's zoning request).

Similarly, the fact that "Neuberger, Quinn regularly communicated with Irwin, Kerr during the zoning litigation on behalf of its client, I. D. Shapiro," (Paper No. 31 at 2-3), does not demonstrate a common legal interest for purposes of the Wulff memorandum. This Court cannot ignore the fact that DJJ was paying Irwin's fees, and these communications undoubtedly pertained to the strategy to defeat the application for BSC, not necessarily to advance the particular interests of the community groups, in face of David Simon's threat.

What is notable is what evidence was not offered in support of the common legal interest of DJJ and the community groups. There is no affidavit from Gloria Sipes or other representatives of the community groups or from David Irwin. There is no contemporaneous documentation that Irwin's clients believed they were subject to a threat of antitrust litigation in common with the defendants, much less any contemporaneous documentation of development of a common legal strategy among the community groups and the defendants.¹⁰ While the record supports the fact that David Simon threatened the community groups and DJJ with a "monopoly" action, it does not follow that the legal interest of the community groups and DJJ is necessarily the same. Indeed, it may well be that the community groups were unaware that the funding was coming from a competitor of Baltimore Scrap, not Marlen Trading.

10 Moreover, BSC argues quite persuasively that certain circumstantial evidence suggests that the community groups did not view this single statement as a serious threat of antitrust action against them.

The facts, however, show that at least Irwin, Kerr did not believe that it or its clients were being threatened with litigation. Irwin, Kerr produced its entire file relating to the underlying zoning proceedings, except for the memorandum at issue. The Irwin, Kerr files do not contain a single communication from Irwin, Kerr to its clients concerning the possibility of being sued by plaintiff. . . . Significantly, in 1994 after the alleged threat of litigation was made, Irwin, Kerr's clients destroyed their files concerning the zoning proceedings. (Paper No. 46 at 1).

Plainly, if the community groups were unaware that DJJ was funding their legal opposition, their interests in relation to DJJ when defending against Simon's claims of fraud, collusion or monopoly would have been inimical to DJJ's interests. The community groups would likely have argued that, like the state court, they too were a pawn in DJJ's attempt to surreptitiously oppose BSC's zoning application; and therefore, that they had not misrepresented their claim to standing or attempted "to perpetrate a fraud on [the] Court by acting as a surrogate for one of BSC's competitors," and were not knowingly part of any "monopoly" attempt. Even if the community groups knew that their legal fees were being paid by a competitor of BSC (and that has not been proven), the record does not show that they were told of, or understood any legal risks or ramifications flowing from this funding. The very content of the Wulff memorandum suggests that there was never any intention that the community groups themselves receive a copy. It casts doubt on the legal and business wisdom of the covert funding. The Wulff memorandum would have provided valuable evidence for the community groups in establishing their defense. See Sheet Metal Workers International Assoc., 29 F.3d at 125 ("The assertion of a claim of privilege for information turned over to the other side . . . knowing of its damning effect, is simply straining too far.").

DJJ also has failed to demonstrate, as the Fourth Circuit in U.S. v. Aramony, supra, requires, "how [the community groups] would be affected (apart from the stain on [their] reputation) by the allegations against [DJJ]." Aramony, 1996 WL at *26. It is unclear whether the antitrust allegations against DJJ would also subject the community groups to the same civil liability, even if knowledgeable about the funding source. BSC has not sued the community groups in the instant case. The thrust of BSC's allegations against the community groups in its memorandum in the zoning proceedings is that the community groups should be denied equitable relief in that proceeding in light of its fraud upon the court. The Fourth Circuit demands more than "conclusory statements" as to the identity of legal interest to sustain a proponent's burden in establishing the privileged nature of its communications. Sheet Metal Workers International Association v. Sweeney, 29 F.3d 120, 125-26 (4th Cir. 1994). DJJ has offered little more than that.

The lack of a demonstrated commonality of legal interest between DJJ and the community groups relates to the two additional reasons for not finding the common interest doctrine applicable in this case, discussed below.

b.) Defendants have not demonstrated that the distribution of the Wulff memorandum was made in the course of an ongoing common enterprise to defend against BSC's threats or to ascertain whether there was a mutuality of interest.

I am not convinced that distribution of the memorandum was made in the course of an ongoing common enterprise to defend against BSC's threats or to ascertain whether there was a mutuality of interests among the threatened parties. See In the Matter of Bevill, Bresler Schulman Asset Management Corp., 805 F.2d at 126 (finding that common interest rule does not apply where the proponent of the privilege "produced no evidence that the parties had agreed to pursue a joint defense strategy"); Bank Brussels Lambert v. Credit Lyonnais, 160 F.R.D. 437, 447 (S.D.N.Y. 1995) ("The common interest doctrine, then, has both a theoretical and a practical component. In theory, the parties among whom privileged matter is shared must have a common legal, as opposed to commercial, interest. In practice, they must have demonstrated cooperation in formulating a legal strategy."). Even assuming that, prior to distribution of the Wulff memorandum, there were communications among the Irwin firm, Neuberger firm, Shapiro and DJJ regarding BSC's threats, there is no evidence that the community groups were ever consulted regarding a mutual defense against BSC, much less that there was a express agreement to pursue a joint defense. Compare In re Grand Jury Subpoenas, 89-3 and 89-4, 902 F.2d at 244 (common interest rule applied where "nothing in the record suggest[ed] that [the disclosure of privileged communications] was not for the purpose of allow[ing] [the client] to continue to participate in the ongoing litigation"); Schwimmer, 892 F.2d at 244 (common interest rule applied where "[t]he attorney's had agreed to cooperate in all matters of mutual concern . . . [and the privileged communication] was imparted in confidence for the ultimate purpose of assisting attorneys who had agreed and undertaken a joint strategy of representation, all of which was well understood [by the client]"). As discussed above, the record is conspicuously silent on this point. While the lawyers were in communication, there is no evidence that Irwin had undertaken a joint defense strategy "well understood by the community groups." Moreover, there is no indication that Workum consulted with the author of the memorandum (Wulff) or the attorney who rendered the legal advice (Wertheimer) to identify parties who shared a common interest before he disclosed the memorandum to Shapiro. See Bay State Ambulance, 874 F.2d at 29 ("When a person provides information to another without first consulting his own attorney, it is difficult to see how the information was given as part of a joint defense, even when the recipient may be viewed as a party with similar interests. The difficulty grows when the person furnishing the information fails to inform his attorney of what he has done for several months. This raises the inference that the information was not intended to be used for that person's defense much less a joint defense. Under these circumstances, the joint defense privilege is not available.").

c.) Defendants have not demonstrated that they had a reasonable expectation that the confidentiality of the memorandum would be preserved after it left DJJ.

I am not satisfied that defendants have sufficiently shown that there was a reasonable expectation that the Wulff memorandum would be maintained in confidence after it left DJJ. The memorandum was marked "PRIVILEGED AND CONFIDENTIAL," and the author of the memorandum, Wulff, did not distribute it to Shapiro, the Neuberger firm, the community groups or the Irwin firm. Workum, however, apparently on his own initiative, shared the memorandum with Shapiro. He did so without consulting Wulff or Wertheimer to determine (1) if the memorandum should be distributed outside DJJ, and (2) if so, to whom. Workum does state in his affidavit that it was his understanding that the Wulff memorandum would only be distributed to persons who shared a common interest with DJJ. (Paper No. 38, Exhibit G at 2). Notably, he does not assert that he told Shapiro not to further disseminate the memorandum, or that Shapiro should only share the memorandum with certain identified persons, or to "persons who shared a common interest with DJJ." All that DJJ has provided on this point is the fact of transmission from Workum to Shapiro. Workum apparently left to Shapiro's discretion — and to whomever else Shapiro disseminated the memorandum — the determination of who should see the memorandum.

Further, although the memorandum was marked "PRIVILEGED AND CONFIDENTIAL," I question whether Workum could reasonably assume in light of recent events that the document would be maintained in confidence once it left DJJ. Indeed, at the time Workum shared the memorandum with Shapiro, a draft legal memorandum, the "errant fax," had only recently fallen into unintended hands — which Workum certainly knew in light of BSC's Memorandum in Opposition to the community groups' Motion to Stay. (Paper 38, Exhibit H). As a consequence of Workum's unilateral decision to share the memorandum, it was disclosed to counsel for organizations that potentially did not share a common interest with DJJ. I find that this haphazard distribution of the memorandum is inconsistent with maintaining the confidentiality of the communication — the essence of the attorney-client privilege — and evidences that there was no intent to maintain the memorandum in confidence.

In sum, although I find that the Wulff memorandum was, at least in part, originally a privileged attorney-client communication, I conclude that the privilege was waived when the memorandum was distributed to David Irwin, if not before.¹¹ I hold that the common interest rule does not protect distribution of the communication in this case for any one of the three following reasons: (1) defendants have not met their burden of showing that DJJ and the community groups (or indeed I.D. Shapiro) shared a common legal interest in defending against BSC's threat; (2) defendants have not met their burden of showing that distribution of the memorandum was made in the course of an ongoing common enterprise to defend against BSC's threat or ascertain whether there was a mutuality of interests among the threatened parties; or (3) defendants have not met their burden of showing that Workum had a reasonable expectation that the Wulff memorandum would remain confidential.¹² At bottom, the Court agrees with plaintiff that defendants have attempted "to create a joint defense privilege after the fact." (Paper No. 60, at 2).

11 While the commonality of legal interest between DJJ and I. D. Shapiro might be considered obvious and therefore support a finding of common legal interest, the record on that commonality is also wanting. While there are suggestions (primarily from the plaintiff) that I. D. Shapiro had a significant financial interest in DJJ and was acting together with DJJ in attempting to thwart BSC's application, there is little hard evidence now in the record before me in support of this assertion. Thus, the transmission of the Wulff memorandum to I. D. Shapiro also waived the privilege in the absence of the defendants' demonstration of a common legal interest once monopoly threats were made. In any event, my finding of the lack of the reasonable expectation of confidentiality might alone defeat the privilege. Even if a joint defense was established between DJJ and I. D. Shapiro so as to have shielded the Wulff memorandum to that point, the transmission of the Wulff memorandum to David Irwin nonetheless waives the privilege. All parties voluntarily agreed to give the memorandum to David Irwin. (But, as discussed above, David Irwin's clients do not have a demonstrable common legal interest with DJJ and I. D. Shapiro). Thus, the Court agrees that DJJ would have to consent to waiver of the privilege. See In re Grand Jury Subpoenas, 89-3 and 89-4 v. Under Seal, 902 F.2d 244, 248 (4th Cir. 1990) (the joint defense privilege cannot be waived without the consent of all parties to the defense). The privilege, however, was waived. DJJ consented to the disclosure of the Wulff memorandum as to the community groups (as Workum's memorandum asserts and DJJ counsel has maintained throughout these discovery proceedings) and I. D. Shapiro (acting through his lawyer, Isaac Neuberger) consented to the disclosure of the Wulff memorandum as to the community groups through transmission to David Irwin, counsel to the community groups. DJJ argues that the communication was made to David Irwin in his role as counsel to the community groups. Since DJJ has disavowed any attorney-client relationship with David Irwin, it is only in his community group role, if any, that the privilege might apply.

12 Additionally, plaintiff argues another basis for defendant's waiver of any attorney-client privilege pertaining to the Wulff memorandum — selective disclosure. (Paper No. 46 at 7-9). Defendants produced portions of Wulff's notes of a telephone conversation between himself and Isaac Neuberger and I. D. Shapiro in which it is memorialized:

Isaac feels we have a very strong case on this appeal — Gloria wants to proceed.

Isaac does not feel that this presents any kind of a FTC problem.

(Paper No. 46, Exhibit 3). Defendants' disclosure of this document suggests selective disclosure and provides an ancillary ground for the production of this Wulff memorandum, which likewise contains advice of Mr. Wertheimer on the antitrust implications of an appeal. See United States v. Jones, 696 F.2d 1069, 1071 (4th Cir. 1982) (finding that where a party selectively discloses privileged attorney-client communications for tactical purposes, the party waives the privilege as to the subject matter of the communication).

It is tempting to withhold the production of a document where the question of its privileged status is complicated and arguably debatable. However, the case law demands the opposite, placing squarely the burden of establishing each element of the privilege on the proponent. Jones, 696 F.2d at 1069. Where, as in this case, the proponent fails to meet this burden, the privilege is unavailable.

For all these reasons, plaintiff's Motion to Compel is therefore granted. However, because defendants' objections to production of the Wulff memorandum were substantially justified, no fees under Rule 37(a)(4)(A) will be awarded.

II. Plaintiff's Motion to Compel Production of Documents from Rich Henderson, P.A.

BSC next moves for an Order compelling production of three documents withheld by the third party law firm of Rich Henderson. (Paper No. 32). It also requests that the Court require Rich Henderson to (1) search for and produce all documents responsive to plaintiff's subpoena or explain the reasons for the disposal of any of these documents; and (2) pay plaintiff's reasonable attorney's fees and costs for filing this motion. Id. Rich Henderson has opposed plaintiff's Motion to Compel. (Paper No. 41). It has also filed a supplemental post-hearing brief in support of its opposition. (Paper No. 45). The withheld documents were submitted to the Court for in camera review. Upon consideration of the parties' papers and review of the withheld documents, I will grant plaintiff's motion in part and deny it in part.

A. Background

Warren Rich is a principal of the law firm of Rich Henderson and has represented DJJ since approximately 1991, when he was a partner in the law firm of Graham James. In 1993 or 1994, Mr. Rich left Graham James. He has continued, however, to represent DJJ.¹³

13 When Rich left Graham James he apparently took the files concerning DJJ with him.

Shortly after filing the present lawsuit, BSC served subpoenas on attorneys with Rich Henderson, seeking documents relating to plaintiff and/or the zoning litigation, to which Rich Henderson responded, stating that it only possessed the following three responsive documents:

1. An inter-office memorandum dated November 18, 1991;

2. An inter-office memorandum dated January 31, 1992;

3. A telecopied communication from I. D. Shapiro of United Holdings Company to Warren Rich dated September 2, 1992.

(Paper No. 22).

Rich Henderson has withheld these documents on grounds that they are privileged attorney-client communications as well as work product qualifiedly immune from production. (Paper Nos. 16 and 22). It also argues that the requested documents are irrelevant to the instant case, hence, are not discoverable under Rule 26(b)(1). Id.

B. Discussion

1. Adequacy of the Production

BSC argues that Rich Henderson's response to its subpoenas is incomplete. In support, it contends that there is substantial evidence, including the privilege log produced by DJJ, indicating that there are additional documents in Rich Henderson's custody and control that are responsive to its subpoena. It accordingly asks that the Court compel Rich Henderson to promptly search for and produce all documents responsive to its subpoena, or if it claims that these documents are privileged, prepare an appropriate privilege log in accordance with this Court's Order of May 7, 1996; and if Rich Henderson responds that it does not have additional documents, that the Court Order it to disclose whether it has disposed of responsive documents, and, if so, when and why.

On March 28, 1996, the Court ordered third-parties served with a subpoena by plaintiff not to destroy or dispose of any documents requested by plaintiff. (Paper No. 5). In response to the Court's Order, Rich Henderson has stated that "[p]ursuant to the Subpoena and this Court's March 28, 1996 Order, respondent has located and assembled the documents requested by Plaintiff." (Paper No. 16). On May 3, 1996, the Court entered a scheduling Order requiring non-parties to list and describe all documents withheld from production. (Paper No. 18). On May 20, 1996 Rich Henderson filed a supplemental response, describing the documents it has withheld and the reasons why they were being withheld. (Paper No. 22).

In its response in opposition to plaintiff's Motion to Compel, Rich Henderson attaches the affidavit of William D. Evans, Jr., an attorney at Rich Henderson. (Paper No. 41). Mr. Evans states that "Rich Henderson" has made a search of its files for documents responsive to plaintiff's subpoena and that it has not disposed of or discarded any files with regard to this matter. Id. Given the small volume of documents produced, and more importantly, the absence from the production of documents that would reasonably be expected to be found in the Rich Henderson files, the Court will enter an Order requiring Rich Henderson to perform another search for documents responsive to plaintiff's subpoena, file an affidavit specifically detailing its search procedure, including person(s) who perform the search, files examined, etc., and any possibly relevant file disposal that has occurred, which might explain the paucity of its documents. However, I will not at this time find that Rich Henderson's response to plaintiff's subpoena is evasive for the purposes of Rule 37.

2. The Withheld Documents

BSC also requests that the Court compel Rich Henderson to produce the three documents it is withholding. I find that the withheld documents are relevant, and that Rich Henderson has not met its burden of showing that these documents are work product or privileged attorney-client communications. Accordingly, I will require that the documents be produced.

a. Relevance

Rich Henderson argues that the three withheld documents are not relevant to the present case and therefore not discoverable. This argument barely merits discussion. Relevance under Rule 26(b)(1) is read broadly to include "any matter that bears on, or that reasonably could lead to another matter that could bear on, any issue that is or may be in the case." Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978); see also Ralston Purina v. McFarland, 550 F.2d 967 (4th Cir. 1977) (noting that the information sought must only be "germane" to the subject matter). Other courts have further observed that "if there is any possibility that the discovery sought may lead to information relevant to the subject matter of the litigation, then the discovery should generally be provided." Wauchop v. Domino's Pizza, Inc., 138 F.R.D. 539, 544 (N.D.Ind. 1991). Because of the important public interest issues implicated in antitrust cases and the need to precisely define issues in these cases, the interpretation of relevance in antitrust cases is even broader. 4 James Wm. Moore, Moore's Federal Practice ¶ 26.07[1] at 26-137 (2nd ed. 1996). The three withheld documents in this case plainly meet the broad definition of relevance under Rule 26(b)(1). These documents are relevant to determining whether opposition to BSC's zoning application was objectively baseless; to ascertaining DJJ's role in opposing BSC's zoning efforts and whether its opposition to the zoning application was intended to anti-competitive weapon; and to discovering who, if anyone, DJJ was communicating with in respect to opposing BSC's zoning efforts. I accordingly will not deny BSC access to these documents on the conclusory claim that the documents are irrelevant.

b. Work Product Immunity

Rich Henderson next argues that the three withheld documents are work product immune from discovery. (Paper No. 45 at 2). To qualify as work product, Rich Henderson must show that the documents were made "in anticipation of litigation or for trial."¹⁴ Fed.R.Civ.P. 26(b)(3). If they were not made in anticipation of litigation, "the inquiry ends because the material is not protected." Sandberg v. Virginia Bankshires, Inc., 979 F.2d 332, 355 (4th Cir. 1992).

14 For a document to be created "in anticipation of litigation" it must be "prepared because of the prospect of litigation when the preparer faces an actual claim following an actual event or series of events that reasonably could result in litigation." National Union Fire Ins. Co. v. Murray Sheet Metal Co., 967 F.2d 980, 984 (4th Cir. 1992).

The burden of showing that the withheld documents in this case were prepared in anticipation of litigation rests with Rich Henderson. Id. In meeting this burden, it cannot simply rely on conclusory statements in its memoranda. 4 James Wm. Moore, Moore's Federal Practice ¶ 26.15[2] at 26-296 (2nd ed. 1996). It also cannot assume that through in camera inspection of the documents the Court will decipher that they were created in anticipation of litigation. Suggs v. Whitaker, 152 F.R.D. 501, 505 (M.D.N.C. 1993). Rather, Rich Henderson must "come forward with a specific demonstration of facts supporting the requested protection." Id. This demonstration is preferably made through affidavits from knowledgeable persons. Id.

Rich Henderson has not met its burden. It has not provided any factual support for its assertion that the documents are protected work product. Indeed, it has not even argued in its papers to this Court that the documents were prepared in anticipation of litigation or for trial.

Review of the documents in camera likewise does not demonstrate that they were prepared in anticipation of litigation or for trial. The November 18, 1991 memorandum, authored by an associate of the Graham James law firm, to Warren Rich, is reporting on inquiries to the Maryland Department of the Environment about the Brooklyn Salvage facility. The January 31, 1992 inter-office memorandum is a status report by another Graham James associate, about BSC's appeal of the BMZA decision. While DJJ may have had a "behind the scenes" role in the community groups' opposition to the BSC application in the zoning proceedings, I fail to see how that shields these DJJ factual memoranda. DJJ was not, of course, a party to the zoning challenge, and had not yet been threatened with any BSC legal action. This Court is not required to, and will not speculate as to how these documents — notably containing only facts, not mental impressions — might qualify as work product. It is up to the proponent of the privilege to clearly demonstrate the applicability of the privilege. This Rich Henderson has utterly failed to do.

Without the benefit of an affidavit or other supporting evidence, the September 2, 1992 facsimile cover sheet from I.D. Shapiro to Warren Rich is clearly not work product. There is no evidence that this document was prepared because DJJ had been threatened with litigation or that there was a reasonable likelihood that litigation was impending. There is no indication that Rich solicited the attached documents from Shapiro to assist his client, DJJ, in a legal matter. The documents attached to the cover sheet — which have apparently already been produced — likewise provide no support for the proposition that the facsimile was provided to Rich to assist him in representing DJJ in impending litigation.

In short, there is no evidence that the withheld documents were created in anticipation of litigation. The documents do not suggest that they were prepared in anticipation of litigation — to the contrary, they indicate that they were created for other purposes — and neither Rich Henderson nor DJJ have cited any evidence to demonstrate the applicability of the privilege. Accordingly, I do not find that these documents are protected work product.¹⁵

15 In its Supplemental Brief (Paper No. 45 at 2), Rich Henderson suggests that the two enclosures to the September 2, 1992 facsimile cover sheet have already been produced. If so, this provides another basis for their production.

c. Attorney-Client Privilege

For similar reasons, I do not find that these documents are protected under the attorney-client privilege. It is hornbook law that to establish the applicability of the attorney-client privilege the proponent of the privilege must show that the communication was made primarily for the purpose of obtaining or delivering legal advice, and that the attorney and client intended that the communication would remain confidential. United States v. Tedder, 801 F.2d 1437, 1442 (4th Cir. 1986). There is no evidence before me indicating that the withheld inter-office memoranda were prepared primarily for the purpose of providing DJJ legal advice or that the parties intended the memoranda to remain confidential. Indeed, there is no evidence that the memoranda were created for DJJ or were even transmitted to DJJ. Likewise, there is no evidence indicating that the withheld September 2, 1992 facsimile cover sheet was provided to Mr. Rich for purposes of obtaining legal advice. Further, Mr. Shapiro is not an employee of DJJ. Hence, I cannot even conclude that the facsimile cover sheet is a communication between an attorney and client. See 4 James Wm. Moore, Moore's Federal Practice ¶ 26.11[2] at 26-179 (2nd ed. 1996) (attorney-client privilege only applies to communications between an attorney and client, "and does not apply to correspondence from other parties that are in the attorney's possession.").

The fact that there is an attorney-client relationship does not endow all communications between the attorney and client with a privileged status, shielding them from disclosure. Moreover, the Court will not speculate as to the reasons the documents were created or construct a scenario under which the documents could arguably be privileged. Contrary to Rich Henderson's assertion, (Paper No. 41 at 2), it is the proponent's burden to establish the applicability of the privilege. They have not met their burden in this case.¹⁶ Because I find that sufficient facts have not been provided to the Court to establish that the withheld documents were created to obtain legal services or to render legal advice, I will not find that these documents are privileged attorney-client communications.

16 Because Rich Henderson had only three documents in dispute and totally failed to provide by affidavit or argument any meaningful justification of their attorney-client and work product status, the Court will not consider anything further on these documents, but orders their production within seven days.

3. Fees

Plaintiff requests that Rich Henderson be ordered to pay its reasonable attorney's fees and costs incurred in filing this motion. The undersigned will deny this request, finding that Rich Henderson's objections, although not meritorious, were substantially justified, insofar as it is uncontroverted that there was an established attorney-client relationship between DJJ and Rich Henderson. Fed.R.Civ.P. 37(a)(4)(A). I will re-entertain plaintiff's request for fees, however, if, Rich Henderson fails to comply with this Order.

III. Plaintiff's Motion to Compel Defendants to Provide Discovery

BSC has also moved for an Order to compel defendants to (1) supplement the description of documents they have withheld as privileged; (2) produce the unprivileged documents listed in the log; (3) provide an explanation as to why portions of certain documents produced were redacted; (4) produce documents in defendants' "Confidential and Not Relevant Documents Log" claimed to be irrelevant to the Noerr-Pennington issues; (5) identify or provide withheld legal bills and invoices of the law firm of Arnold Porter; and (6) answer Interrogatory No. 1 in plaintiff's second set of Interrogatories. (Paper No. 44). Defendants have opposed plaintiff's Motion to Compel (Paper No. 50) to which plaintiff has replied (Paper No. 54). Defendants have also filed a supplemental memorandum in opposition (Paper No. 58) to which plaintiff has replied (Paper No. 61). The Court will grant plaintiff's motion in part and deny it in part.

A. Adequacy of Privilege Log of Documents Withheld and Privileged Status of Those Documents

Pursuant to this Court's Order of May 5, 1996, defendants have provided plaintiff a log of documents withheld from production on privilege grounds — indeed two logs, a "Privilege Log" originally dated June 21, 1996 (Exhibit 4 to Paper No. 44) and a "Confidential and Not Relevant Documents Log," (Exhibit 6 to Paper No. 44). Plaintiff initially objected to the adequacy of the log on grounds that they did not sufficiently identify the subject matter or nature of the communications that were claimed privileged. (Paper No. 44 at 1-2). Subsequent to plaintiff's objections, defendants provided plaintiff a revised "Privilege Log" which described the subject matter of the withheld documents in greater detail. (Paper No. 54, Exhibit 2). This log asserted that the withheld documents are privileged attorney-client communications, and that some of the documents are protected work product. Plaintiff informs the Court that although the revised log provided additional detail, "many of the descriptions are still inadequate." (Paper No. 54 at 2). Specifically, plaintiff requests that defendants supplement the description of the following documents identified in the revised log: Numbers 10, 13-17, 19-39, 43-46 and 48. Defendants object to revising the log on grounds that providing greater detail regarding these documents would invade the attorney-client privilege. (Paper No. 58 at 2-3).

When a party objects to the production of documents by claiming that they are privileged or protected work product it is the burden of that party to describe the nature of the withheld communications or documents "in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege." Fed.R.Civ.P. 26(b)(5). Similarly, "[t]o facilitate its determination of privilege," a court, as in this case, "may require `an adequately detailed privilege log in conjunction with evidentiary submissions to fill in any factual gaps.'" United States v. Construction Products Research, Inc., 73 F.3d 464 (2d Cir. 1996) (quoting Browne of New York City, Inc. v. AmBase Corp., 150 F.R.D. 465, 474 (S.D.N.Y. 1993)). Although a privilege log may be a tool to assist a party in establishing the applicability of the privilege, to do so, the log should contain at least the following: (a) the type of document; (b) the general subject matter of the document; (c) the date of the document; (d) the names of all persons or entities shown on the document to have received or sent the document; (e) all persons or entities known to have been furnished the document or informed of its substance; and (f) the relationship of the author, addressee, custodian, and other recipient to each other. Discovery Guidelines of the U.S. District Court for the District of Maryland, Guideline 9 (D.Md. 1995) (strictly speaking, Local Discovery Guideline 9 applies whenever a claim of privilege is asserted as opposed to the narrower situation where a party uses a privilege log to establish the applicability of the privilege). Accord In re Grand Jury Investigation, 974 F.2d 1068, 1071 (9th Cir 1992); United States v. Construction Products Research, Inc., 73 F.3d at 473 (noting, however, that information such as the relationship between individuals not normally in privileged relationship is typically provided by deposition testimony or affidavit as opposed to a privilege log). It has further been stated that:

The standard for testing the adequacy of the privilege log is whether, as to each document, it sets forth facts that, if credited, would suffice to establish each element of the privilege or immunity that is claimed. The focus is on the specific descriptive portion of the log, and not on conclusory invocations of the privilege or work-product rule, since the burden of the party withholding documents cannot be "discharged by mere conclusory or ipse dixit assertions."

Golden Trade S.r.L. v. Lee Apparel Co., 1992 Dist. LEXIS 17739 at * * * 12-13 (S.D.N.Y. 1992) (quoting von Bulow v. von Bulow, 811 F.2d 136, 144 (2d Cir.), cert. denied, 481 U.S. 1015 (1987)). Other courts have similarly held that a privilege log should provide "a specific explanation of why the document is privileged." Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 145 F.R.D. 84, 88 (N.D.Ill. 1992).

The Court agrees with plaintiff that defendants' original log (and to some extent, revised log) and accompanying memoranda, and affidavits, were too general to permit plaintiff to evaluate the applicability of the asserted privilege as to defendants' withheld documents numbers 10, 13-17, 19-39, 43-46 and 48. However, at this juncture, the Court will not require further supplementation of the log, but will caution defendants to provide greater specificity in the future, as is required under the rules and discovery guidelines, or be subject to an order of production.

Plaintiff has additionally moved for the production of documents identified in DJJ's original log as well as its revised log. In its initial memorandum in support of its Motion to Compel, plaintiff states that defendants' privilege logs contain numerous documents that reflect communications only between non-lawyers, and that these documents should be produced. (Paper No. 44 at 6). It further states that "many of the documents claimed to be attorney client privileged in the logs do not purport to relate to any communication to or from a client but are merely documents provided by lawyers and non-lawyers and not provided to anyone." (Paper No. 44 at 6). Id. "Therefore," plaintiff contends, "these documents are not entitled to any protection and should also be produced." Id.

In its responsive motion in opposition to plaintiff's Motion to Compel, DJJ does not attempt to show that these documents are privileged. Rather, it argues that plaintiff's request should be denied (1) because plaintiff's legal assertions regarding the scope of the attorney-client privilege are legally incorrect; and (2) because plaintiff has refused to specifically identify the documents it requests be produced, instead asserting that general categories of documents should be produced. (Paper No. 50 at 7-8).

In its response to defendants' opposition, plaintiff argues that "[i]t is difficult for Plaintiff to present focused arguments with respect to the production of specific documents without a more detailed description of the documents contained on the privilege log." (Paper 54 at 2). Plaintiff does, however, specifically identify documents that it maintains are not privileged, DJJ withheld document numbers 19, 23-29, 33-36, 38-39, and 43-45.

In camera review of the above identified documents, in conjunction with the privilege log representations, affidavits and argument, however, has enabled the Court to determine that the attorney-client privilege shields the production of document Nos. 23-29, 33-35, 36, 39 and 43-45 in their entirety. Based on the discussion in Section I of this Memorandum, the Court will order the production of document No. 38. Additionally, the Court finds that document No. 19 is not privileged and must be produced.

Plaintiff also requests in its reply memorandum, for the first time, that two additional categories of documents be produced. The first category (documents 1-3 of the revised privilege log) are legal invoices from the law firm of Graham James. The second category of documents encompasses those documents produced in camera that reflect, in whole or part, facts rather than legal advice. (Paper No. 54 at 3-4).

DJJ contends in its supplemental memorandum that the Court cannot require that DJJ produce the Graham James invoices because plaintiff did not request the documents in its Motion to Compel but in a reply memorandum. (Paper No. 58 at 4-5). DJJ similarly argues that in reference to the documents specifically identified by plaintiff in its Reply memorandum, the Court should not require production of these documents because plaintiff did not identify these documents until its reply. Id. at 5-7. DJJ does, however, attempt to make an evidentiary showing that the identified documents are privileged. Id. at 7-13. Plaintiff has responded that it has always sought production of all non-privileged information, that it specifically reserved the right to seek other documents in its Motion to Compel and that any lack of specificity in identifying documents was due to the inadequacy of DJJ's privilege log. (Paper 61 at 2-3). The Court agrees with plaintiff on this point, and its late specification of documents will not be a bar to their production.

As to the Graham James invoices, document Nos. 1-3, the defendants assert only an attorney-client privilege. In camera review of the invoices does not reveal any substantive communications between attorney and client which the privilege is designed to protect. North Carolina Membership Corp. v. Carolina Power Light Company, 110 F.R.D. 511, 517, (M.D.N.C. 1986). Accordingly, the Court will order their production.

I understand that plaintiff is also seeking production of all of the remaining documents listed on the Defendants' "Privilege Log" (Paper No. 58, Exhibit A) (Document Nos. 1-18, 20-22, 30-32, 37, 40-42, 46-48)). I have reviewed in camera all of these documents. With few exceptions, these documents appear either to be "transaction documents" which the Court does not find generally relevant to the Noerr Pennington issues or work product or attorney-client privileged. Accordingly, the Court will only order the production of document no. 47, and will order the production of document nos. 18 and 32 unless the accompanying "materials," in the case of document no. 18 and the accompanying "memoranda," in the case of document no. 32 are produced for in camera review one week from the date of this Memorandum and Order. Finally, as to an unscheduled document, notes dated 3 March 1995, DJJ should submit any rationale for withholding the document by one week from the date of this Memorandum and Order or it will be ordered produced.

B. Information Redacted from Produced Documents

Plaintiff initially requested that defendants explain why information was redacted from documents identified with Bates-numbers 521, 526-28 and 544-48. (Paper No. 44 at 7). Plaintiff has informed the Court that defendants have provided a satisfactory explanation for the redaction of these documents, but that a supplemental production of redacted documents was made (Bates-numbers 550-56) with no explanation as to why information from these documents was redacted. (Paper No. 54 at 4). Defendant has agreed to supply this information (Paper No. 58 at 15 n. 4) and accordingly the Court will make that provision part of this Order.

C. Production of the Transaction Documents

In addition to withholding documents on attorney-client privilege and work product grounds, defendants have produced a log of documents relating to a proposed transaction between BSC and DJJ subsequent to the zoning litigation, (Paper No. 44, Exhibit 6), the "Confidential and Not Relevant Documents Log." DJJ has withheld these documents on grounds that they are confidential and irrelevant to the Noerr-Pennington issues. Plaintiff has argued that some of these documents are dated during the pendency of the zoning litigation, and therefore may be relevant and should be produced. (Paper No. 44 at 2). The Court has reviewed these documents in camera and finds that they are not generally relevant to the Noerr-Pennington issues, but concern an unrelated proposed business transaction between BSC and DJJ. However, certain of these documents do contain references to the prior zoning litigation. The Court will order the defendants to produce the relevant portions of document Nos. 5, 10, 12, 16, 19, and 21 which the Court has determined, based on its in camera review, contain references to the prior zoning litigation. While not necessarily admissible, these documents may lead to admissible evidence. Moreover, both parties have agreed to a mutual exchange of this information. See Paper No. 50, 10 ("If plaintiff produces comments on the zoning proceeding contained in the transaction documents, DJJ will do the same.") and Paper No. 54, 5 ("Plaintiffs have already [produced `comments on the zoning proceeding' contained in the `transaction documents'] in redacted form"). Accordingly, I will not require production of these documents, with the exception of the portions of the documents identified above.

D. Invoices of Arnold Porter

Plaintiff next seeks to compel production of invoices from the law firm of Arnold Porter which relate to the zoning matter. (Paper No. 44 at 2). DJJ has responded that it has reviewed its invoices from Arnold Porter and that none of the invoices are responsive to plaintiff's request. (Paper No. 50 at 5). Specifically, DJJ asserts that Arnold Porter has only submitted general invoices which do not provide a description or itemization of the services rendered in connection with the zoning matter or the time spent or fees of attorneys at Arnold Porter who worked on the zoning litigation. (Paper No. 58 at 17). According to DJJ "Arnold Porter submitted a single monthly invoice aggregating all of its charged to DJJ for all of the matters it handled for DJJ during the month." (Paper 50 at 5-6). DJJ therefore contends that it has no documents responsive to plaintiff's request, but that it will attempt to determine whether it made "any internal allocation of Arnold and Porter's charges to Plaintiff's zoning matter. . . ." (Paper No 58 at 17-18).

Although I too "find it odd that there are no legal bills or descriptions" reflecting the time spent by Arnold Porter attorneys on the zoning matter (Paper No. 54 at 5), the Court cannot compel DJJ to produce something that it says it does not have. Insofar as DJJ has agreed to investigate whether it has made an internal accounting Arnold Porter's services in reference to the zoning litigation, I will make that action part of this Order and require DJJ to provide such information, if it exists, to plaintiff.

E. Plaintiff's Interrogatory No. 1

Plaintiff's Interrogatory No. 1 of its second set of Interrogatories asks defendants to identify any gifts, contributions or other payments it has made to any of the citizens groups, and if any payment has been made, to state, inter alia, the reason for the payment. (Paper 44 at 12). Defendants responded to plaintiff's interrogatory by stating that the only payment it made to the citizens groups was in the form of attorneys' fees, and that these payments "were made to fund the payment of the invoices of the attorneys representing the appellants in appeals to the Circuit Court for Baltimore City and Maryland Court of Special Appeals . . . ." Id. Plaintiff subsequently requested that defendants disclose the "reason" that DJJ funded opposition to the BSC's zoning application. (Paper No. 44 at 13).

Typically, these types of contention interrogatories are permissible. Fed.R.Civ.P. 33(c). However, Rule 16(c)(6) authorizes the Court to enter Orders governing disclosures and discovery pursuant to Rule 26 and Rules 29 through 39. In review of the transcript of Judge Legg's May 3, 1996 conference with the parties, Judge Legg instructed the parties to obtain discovery as to facts regarding the underlying claims and defenses through depositions as opposed to interrogatories. Accordingly, in accordance with Judge Legg's management of the discovery in this complex case under Rule 16, I will not require that defendant supplement its answer to plaintiff's Interrogatory No. 1 in written discovery but through deposition under Rule 30(b)(6).

For all these reasons, plaintiff's motion to compel defendants to provide discovery will be granted in part and denied in part. Because defendants' objections and plaintiff's arguments were substantially justified, the Court will not award fees under Rule 37(b)(4)(A)(B).

IV. Motion of Defendant the David J. Joseph Company to Compel Plaintiff to Provide Discovery

DJJ moves for an Order to compel plaintiff to (1) produce the handwritten notes of BSC's President, David Simon, made from 1991 through 1994; (2) produce documents reflecting communications between BSC and its counsel in the zoning litigation; (3) produce documents relating to two consultants retained by BSC; (4) produce documents concerning BSC's lenders and identify lenders and prospective lenders in connection with the financing of BSC's shredder operation; and (5) provide the factual basis for its claims that (i) DJJ is not entitled to Noerr-Pennington immunity, and (ii) that plaintiff's state law claims are not barred by the applicable statute of limitations. (Paper No. 43). Plaintiff has opposed the motion, and submitted the withheld documents to the Court for in camera review. DJJ has replied to plaintiff's opposition. (Paper No. 53). The Court will grant DJJ's motion in part and deny it in part.

A. David Simon's Notes

Item 218 of plaintiff's privilege log indicates that from 1991 through 1994 David Simon made handwritten notes regarding BSC's efforts to install and operate the scrap metal shredder at its Carbon Avenue facility. (Paper No. 43, Exhibit D). Plaintiff has withheld these notes on grounds that they are work product and reflect privileged attorney-client communications.¹⁷ Id.

17 The log itself describes the documents as work product and privileged attorney-client communications, although only the attorney-client privilege is specifically asserted. Plaintiff does assert both the attorney-client privilege and work product immunity in its response memorandum. (Paper No. 49 at 2).

I will require production of the notes, except as provided below. The proponent of the privilege bears the burden of providing the Court enough information to enable it to determine the applicability of the privilege. United States v. (Under Seal), 748 F.2d 871, 876 (4th Cir. 1984) (attorney-client privilege); Sandberg v. Virginia Bankshares, Inc., 979 F.2d 332, 355 (4th Cir. 1992) (work product privilege). Plaintiff has not met its burden. Plaintiff may not rely upon the Court to review the documents in camera and decode that they are work product or privileged. Pete Rinaldi's Fast Foods v. Great American Ins., 123 F.R.D. 198, 203 (M.D.N.C. 1988). Plaintiff has failed to show, by affidavit or otherwise, that the notes were prepared in anticipation of litigation or for trial thereby work product immune from discovery. Likewise, plaintiff has failed to show, by affidavit or otherwise, that the notes reveal communications by or to its lawyers regarding primarily confidential legal advice, hence, privileged attorney-client communications. Moreover, the undersigned's review of the notes in camera does not reveal the apparent applicability of either the attorney-client privilege or work product immunity. Item 218 consists of portions of Mr. Simon's calendars with references to various attorneys and consultants in the case but without much, if any, substantive text. The attorney-client privilege does not shield the fact of communications between client and attorney. 24 Charles A. Wright Kenneth W. Graham, Jr., Federal Practice and Procedure § 5484 (2nd ed. 1996); U.S.A. v. Kendrick, 331 F.2d 110, 113 (4th Cir. 1964). There is no evidence that these communications were made in anticipation of litigation or for trial to support a finding of work product immunity.

The balance of Item 218 are handwritten notes, many of which are undecipherable and none of which are plainly work product or privileged attorney-client communications. It is impossible to reasonably and reliably determine whether any of these documents are protected. A cursory review of the notes does not reveal any classic interchange between client and counsel, with the client providing facts to the attorney and the attorney providing advice based on those facts. Without a detailed affidavit of Mr. Simon, "this Court is put in the untenable position of having to speculate in order to determine which privileges apply to the individual documents." Caruso v. Coleman Company, Civ. A. No. 93-CV-6733, 1995 WL 384602 at *1 (E.D.Pa., June 22, 1995). That this Court will not do. Thus, without greater explanation and demonstration, this Court is unable to conclude that the David Simon notes are privileged. However, in light of the court-imposed time limits placed upon the parties in this case, and because of the quantity of documents originally at issue, I will permit BSC to file a detailed affidavit in support of its contention that specific portions of the handwritten notes contained in Item 218 are attorney-client or work product privileged within seven (7) days of the date of this Memorandum and Order or produce the notes.

2. Communications Between BSC and its Counsel in the Zoning Litigation

DJJ next moves to compel the production of all documents reflecting communications between BSC and its lawyers in the zoning litigation.¹⁸ (Paper No. 43 at 1-2). BSC has withheld these documents on grounds that they contain privileged attorney-client communications. (Paper No. 43, Exhibit D). DJJ concedes that "ordinarily such communications would be protected by the attorney-client privilege." (Paper No. 53 at 12). It contends, however, that BSC has impliedly waived the attorney-client privilege with respect to these documents by alleging that defendants' opposition to the zoning application was "objectively baseless" and fraudulent. (Papers No. 43 at 6-10). DJJ's argument is unpersuasive.

18 These documents have been identified by DJJ as plaintiff's withheld documents 3, 4, 10, 17, 20, 21, 30, 31, 33, 34, 46-48, 54-58, 66, 67, 70, 73, 83, 84, 91, 92, 94, 104, 112, 117, 118, 126-32, 134, 137, 140, 142-47, 149-51, 153-55, 157, 158, 168, 171, 173-76, 178, 179, 182-86, 190, 192, 193, 195-202, 204, 211, 214, 217 and 218. (Paper No. 43 at 10-11).

a.) Applicability of the Attorney-Client Privilege

The attorney-client privilege recognized in the federal common law has been defined in the case law as follows:

The privilege applies only if

(1) the asserted holder of the privilege is or sought to be a client;

(2) the person to whom the communication was made

(a) is a member of the bar of a court, or his subordinate and

(b) in connection with this communication is acting as a lawyer;

(3) the communication relates to a fact of which the attorney was informed

(a) by his client

(b) without the presence of strangers

(c) for the purpose of securing primarily either

(i) an opinion on law or

(ii) assistance in some legal proceeding, and not

(d) for the purpose of committing a crime or tort; and

(4) the privilege has been

(a) claimed and

(b) not waived by the client.

United States v. United Shoe Machinery Corp., 89 F. Supp. 357 (D. Mass. 1950); see also, Duplan Corporation v. Deering Milliken, Inc., 397 F. Supp. 1146, 1160 (D.S.C. 1974); 4 Moore's Federal Practice, § 20.60[2].

The purpose of the privilege is to protect the substance of confidential communications from client to attorney. Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). Communications from attorney to client may, of course, fall within the privilege. However, such communications are protected by privilege only if they tend to reveal confidential client communications. F.T.C. v. Shaffner, 626 F.2d 32 (7th Cir. 1980); Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21 (N.D.Ill. 1980); Mead Data Central, Inc. v. U.S. Dept. of Air Force, 566 F.2d 242 (D.C. Cir. 1977). "[C]ommunications between [an attorney] and its clients for the purpose of obtaining or rendering legal advice, conducting [a] negotiation of . . . [a] settlement, or defending [a] . . . lawsuit are privileged. However, other documents received by [the attorney] from its clients, which would not be privileged if they remained in the clients' hands, would not acquire protection merely because they were transferred to [the attorney.]" Gould, Inc. v. Mitsui Mining Smelting Co., Ltd., (2nd Cir. 1987) (citations omitted). (emphasis added). Additionally, preliminary drafts of letters or documents which are to be published to third parties lack confidentiality. U.S. v. (Under Seal), 748 F.2d 871, 875, n. 7 (4th Cir. 1984). Finally, billing records and attorney hourly statements which do not reveal client communications are not privileged. In re LTV Securities Litigation, 89 F.R.D. 595 (N.D. Texas 1981); Schachar v. American Academy of Ophthalmology, Inc., 106 F.R.D. 187, 192 (N.D.Ill. 1985); Stastny v. Southern Bell Telephone Telegraph Co., 77 F.R.D. 662 (W.D.N.C. 1978).

Applying these principles, the Court has reviewed in camera all the withheld documents and has concluded that document nos. 10, 20, 21, 31, 46, 48, 57, 70, 117, 118, 153, 155, 171, 179 (except for enclosure), 190 (except for enclosure), 197, 198 (except for enclosure), 199, 200, 201 (except for enclosure), and 217 reflect communications between BSC and its attorneys in the zoning proceeding concerning primarily legal services provided in connection with the zoning litigation, and were maintained in confidence. Accordingly, I will find that these documents are privileged attorney-client communications. Conversely, from my in camera review of the following documents, I have concluded that they are not protected by the attorney-client privilege and must be produced: document nos. 17, 54, 55, 66, 67, 73, 92, 94, 126, 130, 132, 144, 145, 150, 154, 157, 158, 173, 176, 178, 185, 192, 193, 195, and 196. Finally, it is not clear from the face of the following documents that they are protected under the attorney-client privilege: document nos. 4, 30, 56, 58, 83, 84, 91, 147, 171, 183 and 184. However, in light of the court-imposed time limits placed upon the parties in this case and because of the quantity of documents originally at issue, I will permit counsel to file a detailed affidavit to support its contention of privilege within seven days of this Memorandum and Order or produce the documents.

b.) Waiver

DJJ has argued that even if some or all of these documents are privileged attorney-client communications, the privilege was waived because BSC has placed the communications with its zoning counsel at issue in the present case. I disagree. The attorney-client privilege is designed "to promote confidential relations that may well deal with the very suit in question," and therefore, the privilege is not waived solely by the bringing or defending of a lawsuit. 4 James Wm. Moore, Moore's Federal Practice ¶ 26.11[5] at 26-205 (2nd ed. 1996). Federal courts have found waiver of the attorney-client privilege where the party asserting the privilege places communications with his or her lawyer into issue in the case. See generally, 24 Charles A. Wright Kenneth W. Graham, Jr., Federal Practice and Procedure § 5506 at 563-64 (1986). This form of waiver has been described as "at issue waiver," "implied waiver" and the "issue injection exception."

In the majority of cases where courts have found this form of waiver, the party asserting the privilege has taken affirmative steps to place the privileged communication into issue for his or her own benefit. See Barr Marine Products Co., Inc. v. Borg-Warner Corp., 84 F.R.D. 631, 635 (E.D. Pa. 1979) ("Waiver of the privilege can occur . . . by pleading privileged material as a defense, but such waiver has only been found where the party resisting discovery raises as a defense that which transpired between client and counsel, or reliance on advice of counsel, or questions of counsel's authority."). For example, courts have found implied waiver of the privilege where the holder of the privilege places the attorney-client relationship directly at issue by asserting that counsel was incompetent, inadequate or that counsel had engaged in wrongdoing. See, e.g., Heartbreak Cabaret v. Cruz Toledo Restaurant, 669 F. Supp. 1066 (S.D.N.Y. 1988) (to the extent a lawyer must reveal a client's confidences when defending against a charge of malpractice, the plaintiff's bringing of the suit is a waiver of the privilege); see also Maryland Rules of Professional Conduct, 1.6(b)(3) (Lawyer may reveal information relating to representation "to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and client . . . or to respond to allegations in any proceedings concerning the lawyer's representation of the client."). Similarly, where the party's communications with counsel are relevant to determining why a party failed to file a complaint or other pleading within the required time period, the privilege may be impliedly waived. See, e.g., Conkling v. Turner, 883 F.2d 431 (5th Cir. 1989) (where plaintiff alleges in fraud action that claim was not barred by statute of limitations, plaintiff waived any privilege necessary to resolve when plaintiff knew or should have known of the fraud). And where a client asserts reliance on an attorney's advice as an element of a claim or defense, the privilege has been deemed waived. See, e.g., Hearn v. Rhay, 68 F.R.D. 574 (E.D.Wash. 1975) (advice of attorney element of good faith defense in civil rights action). The justification for finding waiver of the privilege in these cases is that it would be inequitable to permit the party to use the attorney-client privilege as a sword by placing the advice of the attorney at issue while permitting the same party to use the attorney-client relationship as a shield to prevent inquiry into the asserted claim or defense.

Predictably, the problem in determining whether there has been an implied waiver of the attorney-client privilege is that it is commonly difficult to ascertain when a party has placed an otherwise protected attorney-client communication "at issue." The parties have not cited, and the Court has not located, controlling Fourth Circuit law on point. A recent decision by the Third Circuit, however, provides persuasive guidance in this regard. See Rhone-Poulec Rorer Inc. v. Home Indem. Co., 32 F.3d 851 (3d Cir. 1994). Here the Third Circuit found that a party places the attorney's advice "at issue" when "the client asserts a claim or defense, and attempts to prove that claim or defense by disclosing or describing an attorney-client communication." Id. at 863 (emphasis added). The court moreover held that a party does not impliedly waive the attorney-client privilege solely because his or her state of mind is put in issue in the action. Id. In reaching this conclusion, the court rejected decisions which have found implied waiver of the attorney-client privilege on grounds that the party's state of mind may have been in issue as "rest[ing] on a conclusion that the information sought is relevant and should in fairness be disclosed." Id. Finding that these decisions are "of dubious validity," the court observed:

Relevance is not the standard for determining whether or not evidence should be protected from disclosure as privileged, and that remains the case even if one might conclude the facts to be disclosed are vital, highly probative, directly relevant or even go to the heart of an issue.

As the attorney client privilege is intended to assure a client that he or she can consult with counsel in confidence, finding that confidentiality may be waived depending on the relevance of the communication completely undermines the interest to be served. Clients will face the greatest risk of disclosure for what may be the most important matters. Furthermore, because the definition of what may be relevant and discoverable from those conversations may depend on the facts and circumstances of as yet unfiled litigation, the client will have no sense of certainty or assurance that the communication will remain confidential.

Id. at 864.

The principal authority defendants rely upon in support of their argument for implied waiver supports the reasoning and rulings of the Rhone-Poulec court, not the position defendants espouse. See WLIG-TV, Inc. v. Cablevision Sys. Corp., 879 F. Supp. 229 (E.D.N.Y. 1994). Here the court acknowledged that it was limiting its holding to the context of a party's effort to evade a statute of limitations bar on equitable grounds. This "narrow issue," the court opined, was to be distinguished from "garden variety cases" where only the knowledge of the party is at issue. "Inevitably, in any litigation, a party's knowledge is relevant," the court noted. Id. at 235.

In determining whether a party has impliedly waived the attorney-client privilege, I am persuaded that the principal inquiry should focus upon whether or not the proponent of the privilege is relying upon the privileged communication to prove his or her case. Because there is no evidence in the present case that BSC is relying upon communications with its counsel in the zoning matter as a sword to prove that defendants are not entitled to Noerr-Pennington immunity, I will not find that it has impliedly waived its privileged communications with counsel in the zoning litigation. Also, and significantly, unlike a case where a party's knowledge may bar a claim under the applicable statute of limitations, I am not convinced in the instant case that the privileged communications are so integral that defendants cannot effectively establish their defense without access to these communications. If BSC's knowledge that defendants were funding the community groups is a relevant issue, defendants can determine whether plaintiff knew of defendants' alleged fraud upon the courts through other sources without intruding upon these attorney-client communications. Finally, even if there was an implied waiver of the privilege in this case, I would not find that there has been a sufficient showing to permit defendants to fish through all of the attorney-client communications between BSC and its counsel in the zoning litigation in the hope that it will stumble upon evidence that plaintiff knew of the defendants' funding of the community groups' zoning suit and thereby was not "defrauded." Cf. Naglak v. Pennsylvania State Univ., 133 F.R.D. 18, 23 (M.D.Pa. 1990) (plaintiff's reliance upon statements of counsel to prove her claim waived privilege as to issues underlying claim, but did not require disclosure of attorney's entire file).

In short, the only cause for finding an implied waiver of the privileged communications in this case is that BSC's knowledge of defendants' alleged fraudulent actions or opinion of the legality of defendants' opposition may be at issue and relevant to the instant litigation. I am persuaded by the reasoning of the Third Circuit in Rhone-Poulec, and I find that this is not a sufficient basis to vitiate the attorney-client privilege. Without evidence that BSC is attempting to prove that defendants are not entitled to Noerr-Pennington immunity by relying upon a communication between BSC and its zoning litigation counsel or without some evidence that it would be manifestly unfair to deny defendants access to these communications, I will not find that BSC has impliedly waived the attorney-client privilege as to communications with its zoning litigation lawyers.

3. BSC's Communications with Carolyn Burridge and M. Willard

Between 1991 and 1992 BSC retained two consultants to allegedly assist it in the zoning proceedings: M. Willard, a land planning consultant, to evaluate land use issues relating to the zoning litigation and Carolyn Burridge, a government relations consultant and the President of CTB Associates, to provide advice to BSC and its attorneys concerning the community organizations' opposition to BSC's zoning application. Id. at 5. BSC has withheld all documents relating to Mr. Willard, Ms. Burridge and CTB Associates ("Consultant documents") on grounds that these documents are work product. (Items 12, 16, 23, 25, 27, 212, 213, 215, 216, and 221 of plaintiff's privilege log). BSC has submitted most of the documents to the Court for in camera review.¹⁹

19 Plaintiff's withheld Document 27, a draft letter from S. Fine to C. Burridge which was not provided to the Court for in camera review. Accordingly, because plaintiff has not provided any supporting evidence tending to show that this document was prepared in anticipation of litigation or for trial, I will not find that this document is protected work product. Accordingly, within seven days of the date of this Memorandum, BSC is to produce this document or provide the document to the Court for its in camera review, with justifying rationale.

DJJ requests that the Court compel production of the withheld consultant documents. In support, it argues that these types of services by non-attorneys are not entitled to work product protection; and that even if the documents are work product, pursuant to Rule 26(b)(3), the qualified immunity provided these documents is overcome in this case by DJJ's substantial need for the documents. (Paper 43 at 12-13). The Court will grant the motion in part and order the production plaintiff's withheld documents No. 212. I will not, however, require production of plaintiff's documents 12, 16, 23, 25, 213, 215, 216 and 221.

DJJ's contention that the withheld consultant documents are not work product because they were not produced by an attorney and "do not reflect the opinions or mental impressions of an attorney," is untenable. Federal Rule 26(b)(3) defines work product as documents "prepared in anticipation of litigation or for trial by or for another party or by or for that party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer or agent). . . ." See Jason's Enterprises, Inc. v. Gen. Accident Ins. Co. of America, Nos. 95-2553, 95-2554, 1996 WL 346515 at *5 (4th Cir. June 25, 1996) ("Because [insurance company's investigator] was an agent or consultant to [the insurance company], the [investigator's] documents generated pursuant to that relationship clearly fall within the scope of protection contemplated by Rule 26."). See generally, 8 Charles A. Wright et al., Federal Practice and Procedure § 2024 at 361 n. 31 (1994).

Document 212 is the agreement between Carolyn Burridge and BSC and enjoys no privileged status.

As to the remaining documents, in camera review of plaintiff's withheld documents 12, 16, 23, 25, 213, 216, and 221 (in conjunction with BSC's explanation in its memorandum) plainly indicates that these documents were prepared in anticipation of litigation. The documents expressly reference either the zoning proceedings or the community groups that opposed BSC's zoning application. Most of these documents were provided, either by courtesy copy or directly, to an attorney representing BSC in the zoning litigation. Those that were not clearly pertain to BSC's then ongoing strategy and concerns vis a vis the zoning proceedings. The documents are dated between October 1991 and September 1992. The record before me indicates that during this time period, BSC was trying to figure out how to deal with community opposition to its shredder in the zoning proceedings. Indeed, the majority of the documents were drafted in July 1992 around the time of BMZA hearing on the BSC's zoning application.

Clearly, if the analysis in these documents had been done by an attorney, rather than non-lawyer consultants, there could be no dispute that the documents were work product. Rule 26 applies with equal force to documents prepared by these types of retained consultants, and accordingly I will find that the documents are protected work product.

DJJ contends that even if the withheld documents are protected work product, pursuant to Rule 26(b)(3), these documents are not immune from discovery because they are not available from other sources and DJJ has a substantial need for the documents. (Paper No. 43 at 13-14). In support of its assertion of necessity, DJJ argues that the documents "may discuss the opposition of those community groups and may contain evidence pertinent to whether such opposition was objectively baseless." (Paper No. 43 at 13). Moreover, DJJ maintains that the documents may discuss the motivation of the opposition to the shredder, the good faith or bad faith of such opposition and other facts pertinent to the subjective part of the `sham' inquiry, and that "[s]uch documents may discuss the support provided to such community groups by DJJ or others and thereby bear upon the fraud claim." Id. Elsewhere, DJJ contends that are discoverable because they may contain party admissions, or other information admissible for impeachment purposes. (Paper 53 at 10).

DJJ's assertions of necessity are unpersuasive. First, DJJ has not shown that it cannot obtain the equivalent information by deposing members of the community groups, or others. See Hohenwater v. Roberts Pharmaceutical Corp., 152 F.R.D. 513 (D.C.S.C. 1994) (party failed to show substantial need for discovery of work product where party could depose all persons who participated in preparation of document and could ask persons about contents of document). DJJ has made no showing that these witnesses are unavailable; that the witnesses have refused to provide information; or that the lapse in time will make it impossible to obtain substantially equivalent information. Second, and equally significant, DJJ has not demonstrated that the information is integral to the preparation of its case. Rather, it speculates that documents "may" be helpful. Finally, in reference to DJJ's argument that these documents may contain party admissions or might reveal impeaching matter, courts have typically required some showing that there is a reasonable likelihood that withheld documents contain information useful for impeachment. DJJ has not cited any evidence that the documents contain party admissions or other impeaching matters relevant to the Noerr-Pennington issues. Moreover, upon in camera review of the documents, I do not find that they contain any party admissions or other information admissible for impeachment purposes. See 8 Charles A. Wright at al., Federal Practice and Procedure § 2025 at 395 (1994) (noting that in many instances only way to determine whether withheld documents contain information useful for impeachment is through in camera review). In sum, DJJ has not shown that it has a substantial need for the consultant documents which overcomes their work product immunity, and I will find that the documents are immune from discovery.

4. Documents relating to BSC's Lenders and Prospective Lenders

DJJ's Document Request No. 10 requests that BSC produce all documents that relate to any financing of BSC's shredder operation in Baltimore or any communication with any prospective lender for such a project. Similarly, DJJ's Interrogatory No. 5 requests that BSC identify all prospective lenders that BSC had communications with in connection with BSC's shredder operation in Baltimore. (Paper No. 43 at 14-15). Plaintiff objects to the interrogatory and accompanying document request on grounds that they exceed the scope of discovery outlined by the Court on May 7, 1996, which limited discovery to the Noerr-Pennington issues. (Paper No. at 49 8). DJJ now requests that the Court compel plaintiff to answer its requests.

DJJ argues that the requests are relevant to the Noerr-Pennington issues implicated in this case because if BSC had communications with actual or prospective borrowers, it is likely that BSC discussed the status of the zoning application and the BMZA appeal and that such discussions may contain evidence pertinent to the issue of whether opposition to the shredder application was objectively baseless or subjectively improper. (Paper No. 43 at 16). "Such discussions," DJJ contends, "may reflect Plaintiff's understanding of the identity of persons supporting the opposition to the shredder application and thereby contain evidence pertinent to the fraud claim." (Paper No. 43 at 16). Further, DJJ asserts that these discussions may also reveal BSC's views concerning the opposition to the shredder. Id. at 16-17.

BSC has apparently agreed to provide DJJ with the identity of its lenders relating to the shredder operation on the condition that DJJ limits communications with these lenders to the issue of whether opposition of the zoning application was objectively baseless. DJJ has apparently refused this very reasonable compromise. (Paper No. 49 at 8-9).

The Court will deny the motion as to any documents plaintiff has regarding its financing of the shredder based on a lack of relevance. It would be only by inadvertence or serendipity, that there would be any documents in those financing files relevant to the Noerr-Pennington issues now in discovery.

5. Defendants' Interrogatory Nos. 7-10

DJJ's Interrogatory Nos. 7-10 ask BSC to provide the factual basis for (i) its claims that DJJ is not entitled to Noerr-Pennington immunity, and (ii) that plaintiff's state law claims are not barred by the applicable statute of limitations. (Paper No. 43 at 17-18). As noted in connection with plaintiff's interrogatory No. 1 discussed above, typically, these types of contention interrogatories are permissible, but in this case the Court has instructed the parties to obtain discovery as to facts regarding the underlying claims and defenses through depositions as opposed to interrogatories. Accordingly, in recognition of Judge Legg's management of the discovery in this complex case under Rule 16, I will not require BSC to answer this question in written discovery but through deposition under Rule 30(b)(6).

For all these reasons, Defendants' Motion to Compel Plaintiff to Provide Discovery is denied in part and granted in part. Because plaintiff's objections and defendants' arguments were substantially justified, no fees under Rule 37(a)(4)(A)(B) will be awarded.

Conclusion

For the foregoing reasons, plaintiff's Motion to Compel Production of Documents from the Neuberger firm and Irwin firm is granted; plaintiff's Motion to Compel Production of Documents from Rich Henderson is granted in part and denied in part; plaintiff's Motion to Compel Production of Documents from Defendants is granted in part and denied in part; and defendant the David J. Joseph Company's Motion to Compel Plaintiff to Provide Discovery is granted in part and denied in part. A separate Order shall issue.